Fraud Prevention for Payment Providers

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Fraud Prevention for Payment Providers

In 2017 Juniper Research found that retailers will lose $71 billion globally from fraudulent CNP (Card-Not-Present) transactions over the next five years.*
Later on, they’ve found that retailers will lose $130 billion in digital CNP fraud between 2018 and 2023. 
Digital payment players will spend $9.6 billion annually on fraud detection and prevention solutions in 2023. **

While the business contribution of fraud prevention is nothing new, its complexity and methods mostly seem impenetrable from year to year, together with the understanding of the real threats in payment processes.
So coherent customer journey and each p2p/b2b/p2b/b2p transaction can contain multiple fraud attempts.

Continually changing technologies and techniques may be a sore point for businesses trying to handle fraud prevention and risk mitigation procedures by themselves.
Thus, today’s payment service ecosystem becomes increasingly aware of the costs of fraud schemes and looks for more sophisticated fraud prevention solutions.

The truth is, fraud prevention is reasonably straightforward, not complicated, and of course, not time-consuming but used over the long run.
The first and the most crucial thing for setting up efficient fraud prevention for your payment service business is to understand your initial requirements regarding security, transactions, customers, and other strategies.

Covery’s fraud prevention solutions for payment service providers are easily matchable with business needs, demands, and other requirements. 
Here is what we have for the PSP industry.

We provide complex risk assessment and specialize in the prevention of: 

  • Card not present fraud 
  • Friendly fraud
  • Merchant fraud
  • Transaction monitoring 
  • KYC verification
  • AML screening
  • Account takeover prevention 
  • Affiliate traffic scoring 

Covery was designed as a solution that spreads risk assessment benefits between different business teams with various requests through the whole sales funnel of a product. 

Payment-related user events Covery analyzes to detect all payment fraud

  • Payment (a stolen card, bonus abuse) 
  • Refund (friendly fraud, chargebacks) 
  • Payout (money laundering, fee fraud) 
  • Transfer (illegal transfer, fraudulent transfer of items) 

Covery allows businesses to analyze other user events to detect marketing fraud patterns

  • Installation (click spamming, simulated installs) 
  • Registration (bot traffic, fake ID) 
  • Confirmation (device emulation, scam) 
  • Login (account takeover, compromised accounts) 

We also designed unique solutions to help you overcome the pain points of merchant payment processing industry:

  • Velocity check calculation for different scope levels – gate, industry, merchant;
  • Hybrid, rule-based and ML scenarios set up for different scopes within various hierarchies – global, industry, merchant; 
  • Refund event analysis for merchant fraud prevention; 
  • Individual capacity limits set up of transaction quantity and amounts for each merchant; 
  • Dynamic limits calculation for user id, email, card, or any other identifier based on historical data. 

Covery, alongside with fraud prevention, supports regulatory compliance procedures such as KYC, KYB, and AML procedure automation, and PSD2 correspondence. 
Our partners Ondato, ShuftiPro, and Ethoca, allow us to automate the crucial AML procedures of our customers without any need in 3d party integrations.

Automated KYC/KYB, AML procedures provide businesses with faster customer onboarding (real-time decisions for less than 1 sec), compliance with all regulations, better ongoing monitoring (customer check on the daily or business-requested basis), global coverage (International PEPs, sanctions, and other watchlists), seamless integration customizable for a specific industry, merchant billing model, or billing logic platform, and full automation with saved operational time, money, and team resources. 
Implementing effective identity verification solutions is a crucial step to managing payment fraud successfully.

In most cases, customers reduce chargeback ratio by 62% after implementing the Covery risk assessment approach that is a combination of customizable rule engine and machine learning models.
A customizable rule engine permits the risk team to create rule hierarchies and scoring models for different scope levels: global, industry, merchant, and to calculate dynamic and static thresholds, velocity checks, and any other formulas within few clicks. 
Customizable machine learning models allow us to predict fraud, VIPs/whales, chargebacks, loyal customers.


A global knowledge database stores 300M reputation records of various user identifiers without linking them to each other to protect PII from illegal usage according to the GDPR policies. 
While using Trustchain business can cut down the number of bots and fraudsters up to 40% having just reputation records of 12 user identifiers: 

  • Email
  • Card ID
  • Phone
  • IP
  • Email domain 
  • System account ID 
  • Device fingerprint 
  • Device ID
  • Entity ID
  • Person ID 
  • IBAN 
  • SWIFT 

Device Fingerprinting 

Device Fingerprinting technology designed by Covery.
We use JavaScript to collect data points during the user journey and analyze potential risks to return a Hash for each unique device in real-time. 
Device Fingerprinting technology is easily combined with other platform features to spot fraud triggers: 

  • Proxy 
  • Device emulation 
  • Browser usage: Tor and others 
  • Installed plugins: AdBlock and others 
  • Not valid country and many others 

Card ID generation 

Card ID generation technology is one of our unique products that helps to spot previously seen credit cards without storing their PAN numbers. 
Our secure PCI DSS level 1 storage will make this happen. 
To receive the card’s reputation, all you need is to send the PAN number to Covery via API. 
We convert PAN into a hash and generate unique Card ID. 
Unique Card ID allows to: 

  • get the reputation of cards on the private, industry, or global scale (inside Trustchain) 
  • spot the correlation between card users, devices, accounts, identifiers 
  • spot countries of card usage with 100% efficiency 


This product helps to avoid chargebacks by providing the ability to respond to cardholder inquiries about questioned charges and transactions.

Covery also has six types of customizable reports with both raw and aggregated data for various business purposes:

  • Events report 
  • Transaction analysis 
  • Agent performance 
  • Rule efficiency report 
  • Rule forecast report 
  • Performance report 

Of course, payment fraud is one of the most spread as the whole payment service industry is evolving rapidly, and not standing still.
If you’re in, you must be aware of fraud threats and be ready to secure your business and customers with robust anti-fraud solutions.

Covery was created in 2016 by a team of talented risk managers and data scientists with 8+ years of experience in risk mitigation and payment expertise. 

We’ve already analyzed 5 billion user actions, prevented 70 credit card fraud attempts, and 250 million risky activities.

Have questions? Contact us.

*Acc. to Juniper Research
**Acc. to Online Payment Fraud: Emerging Threats, Segment Analysis & Market Forecasts 2018-2023 by Juniper Research